Home Buying in 94805>Question Details

Eddie Doming…, Real Estate Pro in Richmond, CA

What's the best way to get an offer accepted in a seller's market?

Asked by Eddie Dominguez, Richmond, CA Thu Dec 13, 2012

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11
All of the below and send a concise cover letter with your offer listing all documents and the order they are in. Make life easy for the Listing agent.
0 votes Thank Flag Link Thu Jan 24, 2013
Eddie:

Since you are a Realtor and your specific question is “What's the ‘BEST’ way to get an offer accepted,”

The key word here is “BEST” – there are lots of good answers below, however, if you really want to land the property, the following is the “BEST” way to do it:

1. Talk to the listing agent as soon as your buyer makes you aware they are interested in the property – you want to make sure you know the offer deadline (if any) and exactly what the sellers are looking for.

2. Contact the listing agent again about 1 hour before the deadline. Ask if they are willing to discuss any of the terms of existing offers or current offered prices. In California, it is NOT illegal for the listing agent to discuss the prices and terms of existing offers – in fact, this practice is clearly spelled out in the C.A.R. form DA (DISCLOSURE AND CONSENT FOR REPRESENTATION OF MORE THAN ONE BUYER OR SELLER), which states:

“NON CONFIDENTIALITY OF OFFERS: Buyer is advised that Seller or Listing Agent may disclose the existence, terms, or conditions of buyer’s offer unless all parties have signed a written confidentiality agreement.* Whether any such information is actually disclosed depends on many factors, such as current market conditions, the prevailing practice in the real estate community, the Listing Agent’s marketing strategy and the instructions of the seller.”

Although real estate practice varies from listing agent to listing agent, it is usually in the seller’s best interest and incumbent in the listing agent’s fiduciary responsibility to the seller to provide you with meaningful information.

3. Explain that you are writing an “AS-IS” all cash offer with a 5-day Inspection Contingency time period (no other contingencies) and you want to make sure there is no need for a counter. If Inspection Reports and Disclosures have been provided up front, you can actually write with no contingencies.

4. After your discussion with the listing agent, write an offer as follows:
• All cash – higher than other existing offers
• Close of escrow – 10 days (unless property is occupied – then go with listing agent’s requested time period – and provide free rent-back if required)
• 10% deposit – non refundable
• No loan contingency
• No appraisal contingency
• No inspection contingency (if full disclosure/inspection docs were provided up front) OR if you did your own inspections prior to writing – otherwise 5 days
• Property to be purchased “AS-IS”
• Standard cost assignments from page 2 of the contract in keeping with local customs
• No home warranty provided by seller

Include the following with your offer:
• Copy of the buyer’s cashier’s check for the deposit
• Verification of funds for the purchase price
• A signed receipt page for all disclosures/reports
• A rent-back agreement if the property is occupied and rent-back is required

There will probably be gnashing of teeth from many who read this AND I’m very well aware that this approach will not work for many buyers (for obvious reasons). However, I’m addressing the word “BEST” only. I’m also very aware that practices such as this are artificially increasing market values and freezing out FHA and VA buyers (I know because I represent a lot of them). I’m also not assigning any “moral” value to this type of practice – simply addressing the word “BEST”.

Since over 30% of purchases in the past few months have been with cash, this is not an unrealistic scenario – similar practices have been used on some of my listings this past year with good results for the sellers.

* Typically the case with REOs.
0 votes Thank Flag Link Fri Dec 14, 2012
well I can take most of what you said EXCEPT for the 10% deposit NON REFUNDABLE.
That's a good business for the other part. I'll be bankrupt in no time.
That's just insane.
Flag Mon Jun 3, 2013
Hi, Make an educated offer based on factual sales data and what you feel the home is worth after seeing other similar homes. If you go in educated it shows the seller you have done your homework and not just shooting in the dark. The terms of an offer also make a world of difference at times. Every situation will be different but if you can find out a sellers motivation you can strategize around that.

Chris
0 votes Thank Flag Link Fri Dec 14, 2012
Make the offer 'really' align with the seller goals.
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That is what the 'data mining' is all about when agents ask the home owner those innocent sounding questions. That is why so much time is spent analyzing the images hanging on the wall and book titles on the desk and end table.
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Get the seller on to the next chapter of their lives as easily as possible.
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If you attempt to bypass established communication channels, the RED Flags will go up.
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Best of success to you,
Annette
0 votes Thank Flag Link Fri Dec 14, 2012
I have to disagree with Phil, bypassing the listing agent will lead to chaos and a very upset listing agent that will not help your offer. The best chances of getting anoffer accepted are making your best offer up front, include a pre-qualification letter, close no longer than 30 days or 45 days for a FHA loan. Limit or eliminate contingincies.
0 votes Thank Flag Link Fri Dec 14, 2012
Unless it's a foreclosure, present the offer to the seller yourself. You're allowed to even if the the seller is being represented.
0 votes Thank Flag Link Fri Dec 14, 2012
1. Write a solid clean offer (nothing worst than receiving an offer that needs a dozen item counter just to clean it up)
2. Tighten your timeframes (no reason why appraisal & home inspection can not be done in 7-10 days)
3. Make sure you have a decent good faith deposit (at least 2% but should be 3%, unless a short sale )
4. Choose a lot of seller select services.
5. Make sure you submit proof of funds and a good local lender pre approval letter
6. Call the listing agent. Let them know you are easy to work with, don't play games, and have eager clients willing to close.
Obviously price plays into it but sometimes it's about taking a solid offer that will close with an agent that is not an idiot. I always check my ego at the door. At the end of the day it's about making a deal for the buyer and seller.
Web Reference: http://www.LauraCoffey.com
0 votes Thank Flag Link Thu Dec 13, 2012
This is always a good topic for discussion.

Not long ago, I wrote about what sellers look for in a good offer
http://activerain.com/blogsview/1687013/what-do-sellers-look…

Generally speaking:
*Price -- obviously, the higher, the better
*Deposit and downpayment -- similarly, the higher the better (shows how serious the buyer is and how much he's willing to risk)
*Contingencies and timelines -- the shorter the better...i.e., quicker escrow period unless the seller prefers a longer period; shorter or no inspections, shorter or no loan appraisal/loan approval contingencies. The strongest offer may have no contingencies at all. But this is a huge risk.
*Terms -- as is, no request for repairs or credits.
*Buyer may offer to pay for some of seller's closing costs
• Sometimes, a preapproval letter isn't enough...some sellers may request proof of funds to make sure the buyer can make good on the contract
* Best and highest offer from the get-go, and not write an offer hoping for a counteroffer. You may get only one chance. Make it count
0 votes Thank Flag Link Thu Dec 13, 2012
Bid as high as you can go and still appraise (over the list price if it makes sense), put as much down as you can, and offer a 30 day close. These are the basics. From there, it helps if your agent knows the listing agent, if the lender is a reputable one within your community, and if the buyer can meet the seller's terms.
0 votes Thank Flag Link Thu Dec 13, 2012
Make sure you pay your own closing costs with what ever loan program you choose or premium financing to cover, credit or contribute towards closing costs. Yes, of course cash offer first, large downs are second and then the rest of typical financing that are not asking for closing costs. Choose a loan program that will allow you to qualify and also pay your own closing costs to strengthen your offers.

http://www.under640ficoscoreloans.com/Pages/Conventional.aspx

http://www.under640ficoscoreloans.com/Pages/ContactSheryl.aspx
Sheryl Arndt, Real Estate Broker – Sr. Loan Officer CA only
REO & Short Sale Specialist
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0 votes Thank Flag Link Thu Dec 13, 2012
clean offer and make sure to have pre-approval letter, proof of funds, short closing ,and no low ball offer. Majority of the sellers prefer 20% down payment and with larger initial deposit.
0 votes Thank Flag Link Thu Dec 13, 2012
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